Compensation and Benefits
June 4, 2015
Dr. George Taylor III
Compensation and Benefits
Employee benefits are a large expense that company’s take on for their employees, but it plays an important part of the organizations strategic business plan. As a small business, benefits may be limited but what and how the company offers their benefits could set them apart from competition.
There are ten limousine companies in the Austin area, and providing a competitive salary and hours could be an incentive to attract the right employees and be a good fit for the company. The salary in Austin is around 38,000 and ranges from 42,000 in Dallas to 46,000 in Houston (“Limousine Driver Salary in Austin TX”,). An option that could be purposed is offering a 15% increase that would be 43,700. The successful marketing edge of offering a higher salary could get some experienced drivers from other limousine companies to come work for Landslide Limousine. This could offer huge savings for the company on training.
Another benefit to consider is whether or not to offer health insurance. Since the number of employees is to be around 25 by the first year it is not mandatory to offer health insurance (Weiss, 2014). The pros to not offering health insurance is that a large amount of money will be saved in the employer side contributions to the health plan. If the amount of employees reaches over 50 than it is mandatory that health insurance is offered.
If you want to offer health insurance it is possible to limit costs (McCarny, 2015). The employees get their health insurance through the healthcare.org website. They pick whatever plan they want. You offer say $200.00 per month per employee to reimburse them the cost. If what they pick costs more than $200.00 per month than they are responsible for the difference, if they pick a plan that costs less than $200.00 per month than they keep the difference. It shows that you care about their health. At that amount per month it would total to $60,000.00 per year.
Paid vacation is another important benefit to consider. It is not a law that you have to offer employees paid vacation (Guerin, 2015). Paid vacation is a benefit worth offering. It allows employees a chance to recharge. Since there is no law making paid vacation mandatory there is a lot of leeway in what you can offer. If you offered one week of paid vacation per employee per year for the first 5 years of employment (considering a 5% raise each year), it would cost the following per employee:
1. First year: $840.38
2. Second year: 882.40
3. Third year: $926.52
4. Fourth year: $972.85
5. Fifth year: $1021.49
Paid vacation is a good incentive to attracting potential employees. There are no laws in regards to how much vacation you can give or how little (Guerin, 2015). You can offer it only to full time employees. The only law for paid time off is that you cannot base the decision on who gets vacation time on race, religion, or disability.
Workers compensation is another benefit that is quite costly. Workers compensation helps to protect you from law